Monday, June 30, 2014

From World Bank publication,DAR ES SALAAM, June 24, 2014 – Tanzania
could create large numbers of new, productive jobs for its people,
especially young adults, if policy makers fostered industrial and
business policies that cater to the country’s booming cities and urban
populations, according to the fifth Tanzania Economic Update released
today.

The report, Who Wants a Job? The Magnetic Power of Cities,
examines prospects for economic prosperity within the context of the
country’s rapid urbanization. By 2030, it is projected that more
Tanzanians will live in urban areas than in rural areas, with Dar es
Salaam alone exceeding 10 million people. A walk through the busy
Kariakoo area of Dar es Salaam today confirms this projection--many of
the vendors and hawkers in the area were not born in the city but have
migrated here in hopes of finding better job and education
opportunities, and a better life for themselves.

“There is no doubt the Tanzanian economy has been doing well over the
past decade,” says Philippe Dongier, the World Bank Country Director
for Tanzania, Burundi and Uganda. “But it is also true that the economy
has failed to create enough productive jobs for a rapidly growing labor
force. Today, there are approximately 23 million Tanzanians in the job
market, and is expected to reach 45 million people by 2030 who have high
hopes of a decent job and a good life.”

Despite Tanzania's good macroeconomic performance over the past
decade, the economy has not been able to generate enough productive jobs
for a fast growing labor force, which is expected to double in the next
15 years. Tanzania will need to create more than one million jobs in
order to absorb the large number of youth joining the labor market each
year.

One way to do this is to harnesses the country’s exploding urban
expansion, and focus on fostering industry growth. If well managed,
urbanization can offer an opportunity for accelerating the
transformation of the Tanzanian economy towards more manufacturing and
services, thus creating new types of jobs. Thus far, the increase in
urban populations has led to the growth of non-farm businesses in urban
centers which have been increasing by almost 15% per year.

Despite this, running a business in urban Tanzania remains
challenging. While key constraints vary according to the nature of the
business, its sector, and its geographical location, the most important
include the lack of the required skills of the labor force; lack of
access to external finance; the cost of connectivity; burdensome and
insecure administrative environment; and the weak rule of law.

Although there is no blue print for harnessing the potential for
growth of urban businesses, a minimal set of improvements is needed to
address the low level of skills in the labor force, high congestion
costs, administrative barriers and insecurity, and obstacles that hinder
businesses from achieving economies of scale. Such efforts will require
a significant policy change at the core, rather than at the margins,
and strong leadership from both the public and private sectors.